So, I recently started playing all the Ultimas in order and am currently playing the fourth game. I've become 8 parts partial avatar, found three stones, found the candle, book, horn and skull, and recruited every possible party member. I know where the mystic armour and weapon are supposed to be, but here's the problem: They simply are not where they are supposed to be. I've searched every singe square both in the grove and in training room and searched with S button, but nothing. I've even looked at couple of let's plays and maps where the exact locations are supposed to be, stood right there and searched, but still found absolutely nothing. I checked my inventory if I'd found them and just not noticed, but nope. Nothing there either.

What's going on? Am I screwed?

In order to get Mystic weapons and armor, you need to meet two requirements, the first of which is most likely the problem.
1. You must have attained Avatarhood. If you are not an Avatar, these items will not show up.
2. You must not already have mystic gear in your inventory. It's OK to have it equipped, however. (Of course, if you haven't obtained it in the first place, of course, this shouldn't be an issue, unless there's a gltch I don't know about.)

In other words, become the Avatar first, and then the mystic gear will appear.

"When the student is ready..." ;)

I noticed you didn't mention the Bell. It's possible you need that too. Could that be your problem?